Huawei is being used as leverage in the U.S.-China trade war.
What you need to know
- Trump said, ‘Huawei is something that is very dangerous.’
- Trump also said that Huawei could be included in ‘some form’ of trade deal.
- Formal talks between U.S. and China have stalled.
Huawei and its 68 subsidiaries were put on a U.S. trade blacklist last week, prompting the likes of Google to cut ties with the brand. The lack of an Android license combined with ARM’s withdrawal means Huawei’s ability to make a phone is nonexistent, and it looks like there won’t be a quick resolution.
In a meeting at the White House on Thursday, US president Donald Trump called Huawei “very dangerous”:
Huawei is something that is very dangerous. You look at what they’ve done from a security standpoint, from a military standpoint, it’s very dangerous.
But Trump also said that it is “possible” Huawei could be a part of a larger trade agreement between the U.S. and China:
If we made a deal, I could imagine Huawei being possibly included in some form or some part of it.
The remarks come on the heels of the U.S. increasing tariffs on $200 billion worth of Chinese products from 10% to 25%, with China retaliating by taxing U.S. goods worth $60 billion. Formal discussions between the two countries have stalled after talks ended without a deal on May 10. As our own Alex Dobie pointed out on Twitter, Huawei is essentially being used as leverage in the trade deal between the two countries.
More likely: This is just leverage and eventually Huawei will get permission to do business with Google, Intel, MS, etc. After all, US worked things out with ZTE last year, and the real concern w.r.t. Huawei is about infrastructure, not phones.
— Alex Dobie (@alexdobie) May 19, 2019
We’ll have to wait and see how this plays out, but it doesn’t look like both parties are anywhere close to a resolution.